Post Election – What needs to be done

Taken from Online Business Journal, a good perspective on what the next few months need to look like. The Country needs to pull together and get things moving!

It’s safe to say that many business owners didn’t want President Barack Obama to be re-elected. But now they’re stuck with him. How do you make this relationship work? Here are three suggestions from business leaders as to how Obama and Congress should work together:

Put aside partisan bickering and start solving problems. This is one area where there is widespread consensus among business leaders. “The time for politics is over. It’s time now for governing,” said Greg Casey, president and CEO of the Business Industry Political Action Committee. “I think the business community is ready to participate in that.” “The nation will expect cooperation from the White House and the Congress,” said John Engler, president and CEO of the Business Roundtable, which represents large businesses. “The partisan rancor, negative rhetoric and perpetual gridlock must come to an end so that we can begin to heal this country and get it moving again,” said Chris Holman, chair of the National Small Business Association, CEO Of Michigan Business Network.com and president of the Greater Lansing Business Monthly. With Obama’s victory comes the responsibility to lead efforts to find bipartisan solutions to problems, business leaders say.

Avoid the fiscal cliff and extend current tax rates for a year. Most business groups doubt that any long-term solution to the fiscal cliff can be reached in the few weeks that remain before these across-the-board spending cuts and tax increases go into effect in January. That’s why they hope Obama and Congress will agree on a short-term solution to avoid the fiscal cliff, and then reach a grand bargain on taxes, spending and entitlement reform next year. That means extending current tax policy for another year, instead of picking winners and losers in a lame-duck session, they say. “There is no reason why all tax relief measures set to expire at year end cannot be extended for another year to allow for a working transition period on tax reform,” said Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council. “There should be no rush to judgment on an issue that will affect virtually every American citizen,” said Barry Rutenberg, chairman of the National Association of Home Builders and a home builder from Gainesville, Fla.

Obama, however, made it clear during the presidential campaign that he thinks tax rates on higher-income Americans should be allowed to increase as scheduled Jan. 1 in order to reduce federal deficits.
“I would think he is going to stand firm on that,” said John Arensmeyer, founder and CEO of Small Business Majority. Arensmeyer thinks raising taxes on high-income Americans next year is a good start toward deficit reduction, since it would raise $1 trillion over 10 years. This tax increase wouldn’t hurt many small business owners, he contends, despite claims to the contrary by other business groups and Republicans. Kerrigan thinks a compromise will be reached to avoid the fiscal cliff, but “someone’s ox will be gored in the short term.” “The fog is too thick from the nasty campaign to see who or what industry that may be,” she said.

Make health care reform work for small businesses. Health care reform is here to stay, thanks to Obama’s re-election and Democrats’ success at retaining control of the Senate. So even business groups that opposed health care reform must now learn to live with it. Some business groups, such as the National Federation of Independent Business, will focus on provisions of the law that they contend make health insurance more expensive, such as a new tax on health insurers. Amanda Austin, NFIB’s director of federal public policy, said the tax will raise the cost of health insurance premiums by about $500 a year.
“We encourage President Obama to make good on his praise of small business during the campaign by working with the new Congress to repeal this tax, which is already holding back hiring at the small business level,” Austin said.

Obama isn’t likely to agree to repealing this tax, since it’s part of how Congress paid for the law’s expansion of health care coverage. Arensmeyer, whose group supported health care reform, said the time for repealing even part of the law is past. It’s time now to “get this thing implemented in a way that’s going to be most favorable to small businesses.” That means states that have been resisting health care reform should move forward with setting up health insurance exchanges for individuals and small businesses so they can get better deals on insurance, he said. It also means encouraging more small businesses to use the law’s tax credits, which can help some firms cover some of the costs of covering their employees.
“Let’s start getting it implemented, and see what works and what doesn’t,” he said.

Building Teams for your Small Business

Shared by Elizabeth Saunders, Founder and CEO, Real Life E®

Entrepreneurs often specialize in coming up with the big idea. When it comes to management skills, they’re usually lacking. With that in mind, the Young Entrepreneur Council asked its own for advice to share with startup founders as they set about building their teams.

1. Take time to train them

“Many entrepreneurs have the deluded expectation that an employee should show up able to do their job. No matter how competent they are, an employee will require training and integration time. An added upshot, thinking about employee training cycles and growth paths really gets you thinking about how to grow your company.” —Charlie Gilkey | Principal, Productive Flourishing

2. Create an entrance interview

“We’ve created some documents for new employees to fill out right when they start about how they like to work, be rewarded, have meetings, etc. By having this written down, it gives our whole team an understanding of how new team members might fit in and creates a better work culture.” —Caitlin McCabe | Founder & CEO, Real Bullets Branding

3. Project management systems save

“Entrepreneurs can keep the big picture in their head, but employees need to have the details in front of them. A good project management software is a great way to keep the team focused and on task. Efficiency and productivity increase when you measure accountability with project management software.” —Lucas Sommer | Founder CEO, Audimated

4. You don’t need a manager

“Teach and empower your employees by giving them parameters to help them do their job autonomously. A sales rep doesn’t need a script, she must understand what makes a product valuable to a customer, and the many ways to point out those benefits. A service rep does not need a “company policy” to refer to, but rather a strategy for solving problems so the client is satisfied.” —Vanessa Nornberg | President, Metal Mafia

5. Set quarterly themes and visions

“Our first year in business, we just did business day-to-day. But we found that even though we were doing awesome things, sometimes we got stuck in a groove because we weren’t shooting for a big goal. So we started setting a quarterly theme for our company. This theme goes into everything we do those three months, and everyone is focused on making that goal a reality. It helps focus efforts.” —Trevor Mauch | CEO (chief entrepreneurial officer), Automize, LLC

6. Open-door policy

“Employees (especially new ones) are bound to make more mistakes than necessary if they feel they can’t ask you questions or get your feedback. Make sure you are accessible and available as much as possible. Literally, keep your door open to give the impression that anyone can visit to bounce an idea or ask a question of you.” —Benjamin Leis | Founder, Sweat EquiTees

7. Culture is king

“Put your employees first, and they will take better care of your customers. As you are building your team, you must define what the inside of your company is going to look like. Your internal brand ultimately dictates how the company is represented on the outside. If you try to design the customer experience first, it will be forced and unnatural. Try to design the employee experience first.” —Nick Friedman | President, College Hunks Hauling Junk

8. Hire to get stuff done

“A small company cannot tolerate people who are lazy, procrastinate or are unable to use limited resources to push forward projects. You need people who can follow through, find clever solutions and workarounds with a sense of urgency, and can take charge of a problem and drive it to a successful solution.”—Matt Mickiewicz | Co-Founder, Flippa and 99designs

9. Practice transparency

“I’m always very honest with my team regarding financials and clients. In this economy, it’s important to be upfront with folks in every aspect of the business—particularly when you’re first getting started. Young professionals enjoy being an integral part of the planning and decision-making process, and it can also help them better understand how the business is run.” —Heather Huhman | Founder & President, Come Recommended

10. Share how to kick butt

“I’m working on this, but it’s become obvious that letting someone know how to kick butt increases the likelihood that they will do so. Smart, talented people want to feel smart and talented, and that’s on you as a business leader. Entrepreneurs are often self-motivated and we forget that getting the most out of people means showing them how to succeed.” —Derek Shanahan | Co-Founder, Foodtree

11. Encourage openness and honesty

“You never want your employees to be afraid to tell you the truth. You can encourage openness and honesty by: 1) Responding calmly when they tell you something has not gone as you expected 2) Talking through a plan for moving forward 3) Agreeing on follow up and accountability.”

Think and Act Like a CEO

While CEO is most commonly used to describe the person in charge of a business operation, the essence of what a CEO does is also applicable to being in charge of ourselves and our lives.

For example, a CEO is someone who optimally manages ever-changing resources to achieve objectives. In business, many of these resources represent well-established people networks, processes and technologies. For example, visit BUZGate.org to help your small business clients to connect with and leverage the expertise of government and nonprofit organizations, such as yours, that will work with them on most any aspect of venture start-up, growth and profitability at no-cost. Also, help them to learn about and connect with high value, cost-effective small business Best Practices.

In life, however, processes for ensuring progress are often less clear and yet even more important. After all, if an individual is not in charge of who they are, it’s hard to be in charge of where they are going! Below are three easy processes to help you help your small business clients to get and stay on track in this regard.

1. Power Notes: While simple in concept, power notes are powerful in application. Power Notes are brief notes that you write to yourself and place where you will see them often to remind you of a specific task, goal or objective. In business, for example, a power note might be to make “x” number of calls each day to close sales.

2. Power Symbols: Like Power Notes, Power Symbols are frequent reminders of a goal or task that is important to you. In business, this might be a keychain of a dollar symbol to help you stay focused on growing sales. Feng Shui is an art that encompasses the use of symbols to bring about specific outcomes in a wide range of areas including professional pursuits.

3. Reality Check: This is a 60 second exercise where you draw a circle in the middle of a piece of paper to represent you. Next, write around the circle all of the things going on in your business and life and then draw an arrow between you and each topic. Point the arrow toward you if you view the topic empowering, and point it away from you if you view the topic as a challenge. Look for balance. Too many arrows pointing out and not in may indicate too much negative stress and not enough peace of mind.

The objective of these tools is to get your ideas where you can see them. The very process of doing so equates to action and action leads to results!

Why working philanthropy into your startup is valuable

There are ways for a startup with limited resources to get involved in charitable activities without continually asking employees for donations. It’s a topic I’m passionate about, as I believe doing good helps the community as well as feeds a positive corporate culture. It also helps establish trust and a solid reputation for your company that ultimately impacts how you do business and support customers. Ultimately, goodwill to the community contributes to the success of your company.

Focus your philanthropy

When determining how to integrate social responsibility into your company, it is important to map out a program to support this activity in the long term. One of the best ways I’ve found to build in philanthropic work is to focus on one or two beneficiaries for the company as a whole. Often, startups can barely afford support staff let alone have a whole barrel of money to donate. By limiting the focus, you can have a greater impact. At the same time, you can keep the company-sponsored charitable activity lighter so that your employees do not feel overwhelmed with the number of events to participate in. In our early years, we’ve typically tried to have one or two events per quarter.

In addition to the sweat equity your team can provide an organization, there are also programs in existence, like the Entrepreneur Foundation, that enable startups to allocate private equity to a donor-advised fund. Such programs can be interesting options for companies that don’t have extra money to donate. And, as entrepreneurs, we hope our donated stock, once we have a liquidity event, will have significantly more value to that organization in the long run than we initially thought.

Philanthropy contributes to culture

Beyond the rewards to your community, philanthropic activity can significantly benefit your corporate culture when used properly. It allows for opportunities to build relationships both within your company and across your industry.

Building a company culture is all about building relationships and respect, and charitable activity is great for team building. For example, whether you host an internal fundraiser or gather a group to clean up a community park, the activity requires individuals to interact across departments. Especially when the project is focused more on a group activity, it encourages employees to get to know each other on a different level — and with colleagues they may not interact with day-to-day.

Beyond your own company, community events can also provide opportunities for your employees to interact with their peers in the Austin area; the tech industry has the Austin Cup and the Entrepreneur’s Foundation Service Day, for example. Having a network within the community helps your employees feel they are part of the larger Austin community and can establish linkages to like-minded companies and people.

At the same time that we foster our corporate philanthropy, SailPoint Technologies    Inc. also makes a point to encourage and allow our people to take time off for their personal charitable projects. This creates a balance for employees to remain dedicated to their own personal causes while feeling good about contributing to the company’s efforts.

Social responsibility attracts, retains talent

Providing opportunities for community involvement can also help you attract and retain talent. I have found this to be especially true for the under-30 crowd, which is a very socially aware age group. Companies like TOMS have reminded people of the importance of doing good for others while building a company. While we don’t all have a business model like TOMS, the younger generation expects their employers to give back in other ways. My experience has also taught me that when you bring people onto your team who care about the community, they are more likely to get passionate about the work you are doing and the team you’ve built. A dedication to helping a community thrive translates to a dedication to seeing our company grow and thrive and to making our community a better place.

As entrepreneurs, we all strive to creatively solve problems, build great companies and, most importantly, work with talented, committed and humble people. Philanthropic work is one of the components to help you do just that.

But remember that regardless of how you translate being socially aware for your company, you need to be authentic in your actions. Outsiders and your employees will see through any lip service you give to charity work. Get out there and plant a tree, serve a meal or paint something, and spend time with your team outside the office. You might be surprised what you learn and how it will impact you and your business in the long run.

Are We Reaching America’s Moment?

This article first appeared in Business Horizon Quarterly, a publication of the National Chamber Foundation.

For a generation, the conventional wisdom in academia, the media, and the punditry held that America is a nation in decline.  Many other Americans have embraced this view. According to a poll by The Wall Street Journal, most respondents believe the country is heading in the wrong direction. In a 2011 Pew Survey, close to a majority felt that China has already surpassed the United States as an economic power.

In reality, a confluence of largely unnoticed economic, demographic, and political trends has put the United States in a far more favorable position than its rivals. Rather than facing the end of its preeminence, America may well be entering its greatest era of opportunity since the fall of the Soviet Union.

In part, this has as much to do with the deficiencies of America’s competitors than its own basic virtues. For instance, the European Union’s prolonged crisis will likely only end in further economic decline. Relative to 2009, for example, U.S. exports have risen by over 10 percent, while those of the Eurozone, including Germany, have increased by roughly one-fifth as much.

Aging Japan has fared better in export growth, but its GDP is expanding at one of the slowest rates in the high-income world. The once fearsome Japanese empire has long passed its prime, with its market share receding in everything from automobiles to high tech.

China’s impressive economic juggernaut is now slowing, and the Middle Kingdom faces increased social instability, environmental degradation, and a creaky one-party regime. Foreign investors, for example, increasingly complain about difficulties with protecting trademarks and technology in China—even in simply transferring money out of the country.

The United States faces its challenges, but it is positioned to achieve a more solid long-term trajectory than its European and Asian counterparts. What it lacks, however, is a strong political leadership capable of seizing this opportunity.

Resources

In contrast to the information-age theorists, we are far from the end of the “petroleum” age or even the industrial era. As the world’s population grows and its middle class expands—particularly in the developing world—the demand for products, either for direct consumption or used in manufactured goods, seems likely to continue to expand. Energy consumption itself, according to International Energy Agency, could rise as much as 50 percent by 2030, with over 84 percent of that increase coming from fossil fuels.

Some assert that this new scarcity regime hurts the United States; it is assumed that as an already developed country, there is little more to be exploited. The prediction of “steady American decline,” predicted by researchers at the Singapore Ministry of Trade and Industry, is just the most recent example of a globalized conventional wisdom.

This assessment may be premature. Unlike most of its major competitors, the United States remains extraordinarily resource-rich; on a per capita basis, the United States’ endowment in terms of raw materials is far greater than that of its prime competitors, including the European Community, India, China, and Japan.

In a world where demand for food is on the rise, both in total and in terms of demand for proteins and higher quality grains, countries with large agricultural surpluses—Australia, Canada, Brazil, and the United States—enjoy intrinsic economic advantages compared to their less well-endowed competitors. America’s exports of soybeans to China have more than doubled in the last four years, topping $10 billion last year. Overall, U.S. farm exports reached a record $135.5 billion in 2011. With global demand increasing, we can expect sustained growth will continue across America’s fertile agricultural regions.

Of course, having a strong food resource base may not guarantee a strong overall economy—witness Argentina over the last century. Yet it does give a leg up on those countries that can use their agricultural surplus as a base for wider economic growth.

Similarly, energy has helped shape the level of economies from antiquity, although it is no guarantor of future growth. After growing largely based on its huge oil and coal reserves in the last half of the 20th century, America fell into the position of a major importer of raw materials—especially oil. Constituting at times close to half of U.S. imports, a persistent negative balance in energy has been eroding the country’s economy for years.

Some more histrionic pundits, such as James Howard Kunstler, predict a coming catastrophe due to depleted resources, bringing with it the end of the largely suburban “American way of life.” Such predictions now seem particularly overdone, given recent shifts in energy discoveries. Due in part to new technologies, such as hydraulic fracking and vertical drilling, estimates of North America’s energy resources have skyrocketed. By 2020, the United States, according to the consultancy PFC Energy, will surpass Russia and Saudi Arabia as the world’s leading oil and gas producer.

In 2011, the United States became a net exporter of petroleum products for the first time in 62 years. American imports of raw petroleum have fallen from a high of 60 percent of its total demand to less than 46 percent. Overall, according to Rice University’s Amy Myers Jaffe, U.S. oil reserves now stand at over 2 trillion barrels (Canada has slightly more). America and Canada together constitute more than three times the total estimated reserves of the Middle East and North Africa. Observers such as Michael Lind believe that new discoveries, particularly of natural gas, mean that we might actually be living in an era of “peak renewables” and are at the onset of a “very long age of fossil fuels.”

Manufacturing

In the end, it turns out that tangible things still matter, even at the onset of the global information age. Outside of the energy producing countries, the greatest growth in the past fifty years has come from manufacturing-led growth: first in America, then in Europe, Japan, Korea, and now China.

We are far from the end of the “petroleum” age or even the industrial era. Since the onset of the new century, the most sustained growth in the world has taken place not in the financial or information capitals, but in those places that produce things. These include the emerging manufacturing centers such as China, the
energy economies in the Persian Gulf, or economies that produce both, like Brazil. In the high-income world, the same pattern exists, particularly relating to resource rich countries like Australia and Canada. Even Germany, the strongest European player, has thrived almost exclusively due to its remarkable industrial exports.

Many conclude that America has already passed its period as an industrial power. Yet the nascent energy revolution also provides the basis for an expansion in manufacturing. Indeed, some of the biggest backers of shale gas exploration are prominent CEOs of industrial firms. A recent study by PriceWaterhouseCoopers suggests shale gas could lead to the development of one million industrial jobs.

Manufacturing’s role in promoting job and income growth is often understated. Although manufacturing employment overall has dropped, the percentage of higher-wage, skilled industrial jobs has been climbing over the last two decades. Much of this growth has been concentrated in formerly rural regions in the West and South, as well as in small towns.

Yet this industrial resurgence is also seen in the American industrial heartland, with rising employment in states such as Ohio and Michigan. U.S. manufacturers have expanded their payrolls and increased production for two straight years, while Japan, Germany, China, and Brazil have scaled back.

Many factors contribute to this resurgence. The shale energy boom is one, but foreign and domestic manufacturers, alarmed by rising wages and labor unrest in China, are seeing more reasons to invest in America. Japanese, German, and Korean companies also have concerns about China’s policies that favor local firms and abscond with investor’s technology. Much the same can be said about American industrial firms. A recent survey of manufacturing CEOs revealed that 85 percent believe production could soon shift from overseas. As President Obama recently acknowledged, this is America’s “moment” to seize the industrial initiative.

Foreign Investment

Rising foreign investment reflects the new American competitiveness. Since 2008, foreign direct investment to Germany, France, Japan, and Korea has stagnated; in 2009, overall investment in the E.U. dropped by 36 percent. In contrast, foreign investment in the United States—by far the largest international recipient of new investment—rose 49 percent in 2010. Canada, Europe, and Japan contributed much of this investment in the United States. Foreign investment now stands at the fourth highest total in American history.

Critically, these firms are investing in sectors including manufacturing and energy. Industrial investment rose by $30 billion between 2009 and 2010, while investment in the energy sector more than tripled to $20 billion. This growth is particularly marked in parts of the country, such as Appalachia and the Southeast, which have historically lagged in terms of higher wage economic growth. Over 30 percent of all new investment in Kentucky in 2010 came from foreign sources, and in 2011, these overseas investors were expected to account for some 40 percent of total investments.

These firms are making a real difference. Energy giants from China, France, and Spain have snapped up stakes in fields in Ohio, Mississippi, Colorado, and Michigan, helping to finance new energy production. In fact, much of the new industrial growth in both the heartland and in the Southeast comes from foreign companies, increasingly including China itself.

The Information Sector

Perhaps the most important test of dominance in the future will be technological. In terms of published technical articles, for example, the United States alone produces three times as many as second-place Japan.

This preeminence is reflected in business. The vast majority of the world’s leading software, biotechnology, and aerospace firms are concentrated in English-speaking countries. Britain and America account for nearly three-fifths of the world global pharmaceutical research spending.

Particularly revealing has been the composition of the critical software industry. A review of the top 500 software companies in the world shows that over 400 of these firms are based in America, as are nine of the top ten in that list.

This dominance also extends to the whole of the Internet, social media, and electronic commerce. Outside of the United States, there are no significant equivalents of Apple, Google, Microsoft, Amazon, and Facebook. This preeminence suggests that the U.S. technology sector remains in a good position to dominate over the next decade.

This technological advantage parallels an arguably equally important cultural one. The United States is by far the world’s largest—in dollar terms—exporter of audiovisual products. Hollywood, for its part, rules the entertainment world, producing 40 percent of the world’s audiovisual exports, a dominion that troubles China’s President Hu Jintao, who recently complained that the “cultural fields” represent “the focal area” for Western “infiltration.”

Demographics

The Great Recession slowed population growth everywhere, but the United States maintains the youngest and most vibrant demographic profile of any advanced country. Between 1980 and 2010, the U.S population expanded by 75 million to over 300 million. In contrast, many European countries, including Germany, have suffered from stagnant population growth; in Russia and Japan, populations have already started declining.

This is not to say that America does not face some severe demographic challenges. Immigration rates are slowing and that could, along with a long-term recession, lead to a difficult slowing in population growth. Overall, according to the Mexican government, the number of people leaving that country dropped from 450,000 annually in the first five years of the last decade to barely 145,000. Similarly, the number of naturalizations from South Korea, India, and Taiwan are still at levels well below those seen in 2008.

If this negative trend continues, by some estimates we could reach zero population growth by 2100 at population levels far below those predicted by the United Nations. More importantly, a decline of immigration and an aging labor force represents a serious threat to the long-term trajectory of the global economy.

Political Factors

Given the political difficulties that arose in the last two presidential administrations, enthusiasm about America’s political system is hard to justify. Regardless of these shortcomings, America’s constitutional systems of laws and checks on central power remain a critical advantage. Immigration has declined with the recession, but the United States can expect to welcome religious and political exiles—such as Middle Eastern Christians displaced by the “Arab Spring”—as well as Greeks and Irish fleeing Europe’s economic decline.

Many from Russia and China are seeking to immigrate to the United States, Canada, or Australia to protect their property or to live a freer life. Indeed, among the 20,000 Chinese with incomes over 100 million Yuan ($15 million), 27 percent have already emigrated and another 47 percent have said they were considering it, according to a report by China Merchants Bank and Bain & Co., published in April 2011.

Ultimately, America’s power lies with the appeal of its language, culture, scientific prowess, and democratic legal structures. Yet this power needs to be unleashed and America’s distinctiveness leveraged. Sadly, no leading politician or political party seems ready to embrace the country’s new strategic advantages. Many may find the very notion distasteful, having swallowed declinism with their academic mother’s milk.

Worse still, some national policies today work against the wellsprings of national resurgence. Proposals to raise income taxes on families making over $250,000 directly threatens the aspiring entrepreneurial class more than the real “rich” whose fortunes are protected by low capital gains taxes and family trusts. Most critically, the current hostility by those on the political left to fossil fuels represents a direct threat to the country’s greatest new source of economic advantage and threatens to strangle America’s recovery in its infancy.

Not that Republicans are any less short-sighted. Many reject the infrastructure needed for an expanding economy—ports, roads, bridges, as well as worker training and support for basic research—as mere “pork.” Budget restraint and fiscal discipline are important, but preparing the country for more rapid economic growth requires an active, supportive government for such things as oil and gas pipelines.

Many on the political right also tend to view immigration as something akin to a hostile invasion.

Yet some key industries—notably manufacturing and high tech—rely heavily on immigrant entrepreneurship, intelligence, and the values of hard work. Running against immigration constitutes an assault on the nation’s increasingly diverse demographics.

So although all of the essential elements for a strong, sustained recovery are in place, the big question remains whether America will find political leaders capable of tapping the country’s phenomenal potential. Even for an optimist for America’s future, it’s hard to be too terribly hopeful that this leadership will emerge in the near future. n

NCF Fellow Joel Kotkin is an internationally-recognized authority on global, economic, political and social trends. Kotkin is a distinguished presidential fellow in Urban Futures at Chapman University and an Adjunct Fellow for the Legatum Institute in London. Kotkin is also the author of The Next Hundred Million: America in 2050, The New Geography: How the Digital Revolution is Reshaping the American Landscape, and Tribes: How Race, Religion and Identity Determind Success in the New Global Economy.

2012 Success Award Winners Recognized at Event at State Capitol 3-29-12

A group picture of 2012 Success Award Winners for Arizona Small Business Development Center Network, picture taken March 29th with Governor Jan Brewer

Energy Progress Report is More about Politics

Contributed by Sean Hackbarth U.S. Chamber of Commerce

High gas prices have become the hot political issue.  They are causing the public to sour on the economy, and it’s hurting the administration politically.  An ABC/Washington Post poll found65% of Americans disapprove of how the administration is dealing with the issue.

Today, the White House has been engaged in a full-court media blitz: interviews with local television station; the President’s energy team at today’s White House press conference; and the release of a progress report to the President’s energy blueprint released last year.

In the progress report, the administration continues to pat itself on the back over an increase in domestic oil and gas production it can’t take credit for.  This pattern has gone on for nearly a year even after National Journal reported the administration reaped the rewards of previous administrations

[O]il production was significantly higher in 2009 than in the years prior. Obama may have been in office for most of that year, but the oil production numbers are due to action taken before he became president. In 2010, most if not all of the production increase recorded is likely due to action that predates Obama, since Obama didn’t take any major action expanding offshore drilling his first year in office.

Also as part of their media push, the White House produced an infographic explaining gas prices, but they’re too clever by half. A section is titled, “Increased Production Doesn’t Lower Gas Prices” and has some graphs making their argument.

Let me get this straight: The administration prides itself for increased domestic oil and gas production, but implies that more oil doesn’t have anything to do with gas prices, because the biggest factor is the world oil price. They’re both trying to take credit and deflect blame.

The infographic also keeps pushing the broken-record line that raising taxes on oil and gas companies is a solution because GASP they earn profits. Uh, no.

Last week, former Presidential adviser, Steve Rattner said the U.S. has “absolutely no energy policy.” If they do have one, it’s as muddled as their defense of what they’ve been doing about gas prices.

US Chamber Agenda for America

With more than 23 million Americans unemployed, underemployed, or having given up looking for jobs, it’s time for the president and Congress to work together with the business community. It’s time to clear away government impediments and help the private sector grow the economy and create millions of new jobs without raising taxes or increasing the deficit. Here’s how.

check markProduce American Energy and Rebuild Our Infrastructure

  • Create 1 million new jobs by 2018 by allowing greater exploration of America’s vast oil and natural gas resources
  • Produce 20,000 well-paying jobs in the short term and thousands more over time by ultimately approving the Keystone XL pipeline
  • Generate up to 1.9 million new jobs and rebuild our nation’s infrastructure by passing long-term highway and aviation bills and leveraging private capital for infrastructure investment.

check mark Expand Trade and Tourism

  • Support millions of new American jobs by concluding new trade pacts with our Asian and European trading partners – as well as with emerging countries around the world – and lowering barriers to international investment.
  • Create 1.3 million new jobs promoting tourism and making it easier for foreign visitors to travel and spend money in the United States.

check markEnact Regulatory and Legal Reform

  • Save and Create hundreds of thousands of jobs by stopping the avalanche of new regulations and ridiculous lawsuits, reforming the rulemaking process, and speeding up permitting to get projects moving faster.

check markEncourage Innovation

  • Preserve 19 million jobs in IP-intensive industries by protecting America’s intellectual property from pirates and counterfeiters.
  • Fill 3.2 million vacant American jobs and bridge the “skills gap” by retraining American workers and reforming the visa program to attract the world’s best and brightest minds to this country.
  • Reform a globally uncompetitive tax code that is driving businesses, jobs, and investors away from the United States.

check markControl Government Spending and Reform Entitlements

  • Control deficits and the national debt this year to stop draining the economy of its productive capital.
  • Make needed adjustments to Medicare, Medicaid, and Social Security to save these programs and prevent them from consuming the entire budget.

The Eight Factors of American Competitiveness

This article originally appeared in Business Horizon Quarterly, a publication of the National Chamber Foundation.

America has momentous decisions to make. Extraordinary challenges and unprecedented opportunities shaped by an increasingly competitive global economy, shifting demographics, and expanding freedom are taking shape all around us. At the same time, alarming indicators and dangerous trends in our nation’s economy, governance, and politics are seriously impeding our progress and threaten America’s competitiveness position.

We are emerging too slowly from the severest economic downturn since the Great Depression. Eight and a half million jobs were destroyed. Twenty-five million Americans are unemployed or underemployed. Uncertainty and anxiety remain high, and skepticism about our ability to come to grips with the challenges before us is rampant. The country remains hungry for facts, solutions, and decisive action, beginning with an honest analysis of exactly where we stand in the competitive global economy and what we must do to prosper.

Our nation’s level of economic preparedness and capacity to grow and prosper is often referred to as the state of “American competitiveness.” At its core, “competitiveness” is our purest leading economic indicator. It captures the complex set of factors and conditions that determine the extent to which job creators – the indispensable enablers of national prosperity – are well positioned and suitably incentivized to start businesses, develop products, expand operations, hire workers, and mobilize investment here in the United States.

Fundamentally, competitiveness is about the following question: When entrepreneurs, corporate planners, and other job creators decide where to locate new facilities and jobs, as well as where to direct capital, what will motivate them to select the United States over an ever-growing list of appealing destinations? A starting point in understanding our competitive position is to identify the questions that job creators ask themselves in determining when, where, and how to take risks, invest capital, and create jobs in the United States versus the other places they can go.

From the wealth of research, surveys, and inputs on this topic, the decisive questions boil down to “the eight factors of American competitiveness.”

  1. Will we have access to open, growing markets at home and abroad? Job creators require access to vibrant and growing consumer demand so that enterprise can flourish. They thrive by agilely supplying customers who have increasing purchasing power in open and sizable domestic and international markets.
  2. Will the costs of doing business be reasonable and competitive? Job creators often survive – or not – as a result of their costs of doing business. To promote success, enterprises need tax costs that are competitive and fair; government policies that promote investment, hiring, and expansion; and a regulatory system that is sensible, flexible, and consistent.
  3. Will we, our suppliers, and our customers have reliable access to affordable capital? Job creators must have efficient access to ample financing at a reasonable cost to fund start-ups, expansion and employment.
  4. Will we have access to a properly skilled, agile, and competitively priced workforce? Job creators depend on ample access to world-class human capital with the proper skills and productivity to be the best and sustain success.
  5. Will we be supported with modern infrastructure and a reliable energy supply to sustain business operations? Job creators must have efficient world-class transportation and communications infrastructure and sustainable access to reasonably priced energy to keep operations humming and goods moving smoothly, swiftly and reliably.
  6. Does the country have sound fiscal conditions and wise macro-economic policies? Job creators require a fiscal environment that ensures they will not be driven into the ground by budget policies that increase the cost of capital, hamper the free and productive flow of capital or demand unreasonable taxes.
  7. Does the country have transparent governance, a fair and efficient legal system, and stable civil society? Job creators take enormous risk in committing capital, hiring workers, and contributing to the economy, and they look to limit risk from political, social, legal, and economic instability arising from ineffective governance, an unfair legal system, and social decay and disorder.
  8. Does the country offer a dynamic culture of innovation? Job creators depend on a strong national ecosystem of innovation to refresh opportunity by spawning new ideas for products, services, and processes; to provide the means to efficiently marshal innovations from research and conception to development, demonstration and commercial deployment.

Over the past year, the National Chamber Foundation has researched and studied these questions carefully to:

  • Define and examine the dynamics of each factor;
  • Evaluate how the United States is faring compared to our chief competitors and our own potential to excel; and,
  • Prescribe solutions to maximize our strengths, fix our problems, and mitigate the difficulties we can’t or won’t change.

As a context for the analysis of these eight competitiveness factors, there are three broader findings that serve as an important frame of reference:

The United States has a compelling need and opportunity to boost its competitiveness. The globalized economy is a fact, not a policy choice. The requirement to compete is a necessity, not an option. While the burgeoning global workforce poses significant competitive challenges, the dramatic surge in global spending power and the expanding reaches of freedom offer unprecedented opportunity for Americans to sell goods and services to markets hungry for U.S. innovation and know-how. Yet, a defining feature of a freer world is that private enterprises are at liberty to be or not; to come to the United States and remain here or not. Accordingly, the adverse consequences of U.S. competitive failure and economic retreat are severe and unacceptable.

The United States has significant vulnerabilities. America’s standing in international economic competitiveness is falling as other countries are gaining fast, and in some cases, surpassing us. In almost every one of the World Economic Forum’s (WEF’s) 12 pillars of global competitiveness, America is losing ground. A decade ago, the United States led in thirteen of the twenty “country attractiveness” factors in McKinsey Global Institute’s evaluation of economic fundamentals, business climate, human capital, and infrastructure. Today we lead in only seven, having sunk to the bottom quartile of the factor that the majority of surveys and evidence suggest is most important in attracting investment and jobs: business taxes. America is perceived as continuing to fall in fourteen of the twenty categories, staying the same in six and rising in none. When asked to select the 5 most problematic factors for doing business in their country, American executives selected, in order, tax rates, inefficient government bureaucracy, access to financing, tax regulations, and inflation. Negative trends in our fundamentals threaten continued backsliding. In the words of the WEF, “A lack of macroeconomic stability continues to be the United States’ greatest area of weakness.” Indeed, in macroeconomic stability – considered absolutely necessary for growth and one of the four pillars that support a country’s entire economic structure – we rank 90th, between Senegal (89th) and Serbia (91st).

Strategies to boost U.S. competitiveness must account for economic realities, historical lessons learned, and consequential trends. As America works to reverse adverse trends and improve our competitive standing, we must take into account key economic realities, historical lessons, and consequential trends shaping the global environment.

  • The global flow of capital, liberal international exchange of goods and services, and economic cooperation and interaction across borders greatly benefit the United States. As stated in a report by the National Research Council, “The broader process of economic globalization, of which the restructuring of innovative-related activities is one part, is on the whole beneficial for the United States. Consumers benefit from higher-quality, lower cost, and more innovative products; employees benefit from the ability to exploit their skills in a global rather than a domestic market; firms benefit from lower costs and economies of specialization through vertical specialization and increased collaboration; and the processes of trade liberalization can have beneficial political consequences for international relations.”
  • U.S. competitive success will require excellence in all three major economic sectors: manufacturing, services and agriculture. A service economy alone can’t sustain prosperity, particularly given that manufacturing produces the largest multiplier effect and is a major stimulus for innovation on which long-term economic vigor depends. Moreover, America is a major breadbasket of the world, and we must aim for it to remain so.
  • Our strategies must encompass the full mix of enterprises that compose the U.S. business system. Domestic enterprises (small, medium and large), U.S.-owned multinational corporations (MNCs), and U.S. affiliates of foreign-owned MNCs each play a vital role in U.S. job creation, economic growth, and global competitiveness.
  • America’s policies and approaches must account for the continuous evolution in the skill requirements as well as the nature of work and employment. Innovation and the dynamics of global competition are reshaping employment opportunity, requiring new skills – particularly in the technical areas.
  • Technology-driven productivity will heavily influence the economy and job patterns. Advanced technology will perform a greater range of activity. As the Council on Competitiveness states, “(such) productivity will result in greater efficiency, which means less labor will be required to perform a given task. This creates a healthy economy as long as businesses are innovating, and public policy is stimulating new business creation, new job creation, and attracting investment to drive the creation of new jobs.” Some jobs will leave the United States and never return. Other jobs will be lost due to technology and efficiency gains. Our challenge and opportunity is to invent new products and industries that create new, different, and often better jobs.
  • We must come to grips with the rise of state capitalism and the increasing role of governments in luring job creators. Competitors such as Russia and China practice state capitalism, in which governments play an active political role in markets. America must recognize the serious implications of these models and strategies and formulate effective measures to counter the competitive disparities they pose – while maintaining our free enterprise values, which have served us well and will do so over the long run.

No matter what tactics and approaches particular nations adopt, it is clear that many nations are devising and implementing more sweeping and sophisticated competitiveness strategies than ours – a discrepancy we must remedy if we are to succeed. We can neither ignore nor emulate these approaches; rather, we must develop more effective competitiveness strategies of our own, consistent with our principles.

President Barack Obama stated the overarching task clearly and succinctly, “We know what we have to do to win the future … we have to make America the best place on earth to do business.” This initial article and the subsequent follow-on offerings identify the critical, practical measures necessary to achieve the president’s well-stated imperative. It does so from the perspective of private-sector job creators – those who are on the economy’s front lines and whose decisions so greatly determine the level of employment and the size of the economy – the ultimate arbiters of whether we are indeed creating the world’s best business environment.

John Raidt, the lead author, serves as a senior fellow at the Atlantic Council. Raidt has over 21 years of public policy experience, including national and homeland security, energy, the environment, and natural resource management. Before coming to the Atlantic Council he served as a professional staff member of three national commissions as well as a senior staff member in the U.S. Senate.

Five Leadership Lessons From James T. Kirk

Captain James T. Kirk is one of the most famous Captains in the history of Starfleet. There’s a good reason for that. He saved the planet Earth several times, stopped the Doomsday Machine, helped negotiate peace with the Klingon Empire, kept the balance of power between the Federation and the Romulan Empire, and even managed to fight Nazis. On his five-year mission commanding the U.S.S. Enterprise, as well as subsequent commands, James T. Kirk was a quintessential leader, who led his crew into the unknown and continued to succeed time and time again.

William Shatner as Kirk in a promotional photo...(Image via Wikipedia)

Kirk’s success was no fluke, either. His style of command demonstrates a keen understanding of leadership and how to maintain a team that succeeds time and time again, regardless of the dangers faced.  Here are five of the key leadership lessons that you can take away from Captain Kirk as you pilot your own organization into unknown futures.

1. Never Stop Learning

“You know the greatest danger facing us is ourselves, an irrational fear of the unknown. But there’s no such thing as the unknown– only things temporarily hidden, temporarily not understood.”

Captain Kirk may have a reputation as a suave ladies man, but don’t let that exterior cool fool you. Kirk’s reputation at the Academy was that of a “walking stack of books,” in the words of his former first officer, Gary Mitchell. And a passion for learning helped him through several missions. Perhaps the best demonstration of this is in the episode “Arena,” where Kirk is forced to fight a Gorn Captain in single combat by advanced beings. Using his own knowledge and materials at hand, Kirk is able to build a rudimentary shotgun, which he uses to defeat the Gorn.

If you think about it, there’s no need for a 23rd Century Starship Captain to know how to mix and prepare gunpowder if the occasion called for it. After all, Starfleet officers fight with phasers and photon torpedoes. To them, gunpowder is obsolete. But the same drive for knowledge that drove Kirk to the stars also caused him to learn that bit of information, and it paid off several years later.

In the same way, no matter what your organization does, it helps to never stop learning. The more knowledge you have, the more creative you can be. The more you’re able to do, the more solutions you have for problems at your disposal. Sure, you might never have to face down a reptilian alien on a desert planet, but you never know what the future holds. Knowledge is your best key to overcoming whatever obstacles are in your way.

2. Have Advisors With Different Worldviews

“One of the advantages of being a captain, Doctor, is being able to ask for advice without necessarily having to take it.”

Kirk’s closest two advisors are Commander Spock, a Vulcan committed to a philosophy of logic, and Dr. Leonard McCoy, a human driven by compassion and scientific curiosity. Both Spock and McCoy are frequently at odds with each other, recommended different courses of action and bringing very different types of arguments to bear in defense of those points of view. Kirk sometimes goes with one, or the other, or sometimes takes their advice as a springboard to developing an entirely different course of action.

However, the very fact that Kirk has advisors who have a different worldview not only from each other, but also from himself, is a clear demonstration of Kirk’s confidence in himself as a leader. Weak leaders surround themselves with yes men who are afraid to argue with them. That fosters an organizational culture that stifles creativity and innovation, and leaves members of the organization afraid to speak up. That can leave the organization unable to solve problems or change course. Historically, this has led to some serious disasters, such as Star Wars Episode I: The Phantom Menace.

Organizations that allow for differences of opinion are better at developing innovation, better at solving problems, and better at avoiding groupthink. We all need a McCoy and a Spock in our lives and organizations.

3. Be Part Of The Away Team

“Risk is our business. That’s what this starship is all about. That’s why we’re aboard her.”

Whenever an interesting or challenging mission came up, Kirk was always willing to put himself in harm’s way by joining the Away Team. With his boots on the ground, he was always able to make quick assessments of the situation, leading to superior results. At least, superior for everyone with a name and not wearing a red shirt. Kirk was very much a hands-on leader, leading the vanguard of his crew as they explored interesting and dangerous situations.

When you’re in a leadership role, it’s sometimes easy to let yourself get away from leading Away Team missions. After all, with leadership comes perks, right? You get the nice office on the higher floor. You finally get an assistant to help you with day to day activities, and your days are filled with meetings and decisions to be made, And many of these things are absolutely necessary. But it’s sometimes easy to trap yourself in the corner office and forget what life is like on the front lines. When you lose that perspective, it’s that much harder to understand what your team is doing, and the best way to get out of the problem. What’s more, when you’re not involved with your team, it’s easy to lose their trust and have them gripe about how they don’t understand what the job is like.

This is a lesson that was actually imprinted on me in one of my first jobs, making pizzas for a franchise that doesn’t exist anymore. Our general manager spent a lot of time in his office, focused on the paperwork and making sure that we could stay afloat on the razor-thin margins we were running. But one thing he made sure to do, every day, was to come out during peak times and help make pizza. He didn’t have to do that, but he did. The fact that he did so made me like him a lot more. It also meant that I trusted his decisions a lot more. In much the same way, I’m sure, as Kirk’s crew trusted his decisions, because he knew the risks of command personally.

4. Play Poker, Not Chess

“Not chess, Mr. Spock. Poker. Do you know the game?”

In one of my all-time favorite Star Trek episodes, Kirk and his crew face down an unknown vessel from a group calling themselves the “First Federation.”  Threats from the vessel escalate until it seems that the destruction of the Enterprise is imminent. Kirk asks Spock for options, who replies that the Enterprise has been playing a game of chess, and now there are no winning moves left. Kirk counters that they shouldn’t play chess – they should play poker. He then bluffs the ship by telling them that the Enterprise has a substance in its hull called “corbomite” which will reflect the energy of any weapon back against an attacker. This begins a series of actions that enables the Enterprise crew to establish peaceful relations with the First Federation.

I love chess as much as the next geek, but chess is often taken too seriously as a metaphor for leadership strategy. For all of its intricacies, chess is a game of defined rules that can be mathematically determined. It’s ultimately a game of boxes and limitations. A far better analogy to strategy is poker, not chess. Life is a game of probabilities, not defined rules. And often understanding your opponents is a much greater advantage than the cards you have in your hand. It was knowledge of his opponent that allowed Kirk to defeat Khan in Star Trek II by exploiting Khan’s two-dimensional thinking. Bluffs, tells, and bets are all a big part of real-life strategy. Playing that strategy with an eye to the psychology of our competitors, not just the rules and circumstances of the game  can often lead to better outcomes than following the rigid lines of chess.

5. Blow up the Enterprise

“‘All I ask is a tall ship and a star to steer her by.’ You could feel the wind at your back in those days. The sounds of the sea beneath you, and even if you take away the wind and the water it’s still the same. The ship is yours. You can feel her. And the stars are still there, Bones.”

One recurring theme in the original Star Trek series is that Kirk’s first love is the Enterprise. That love kept him from succumbing to the mind-controlling spores in “This Side of Paradise,” and it’s hinted that his love for the ship kept him from forming any real relationships or starting a family. Despite that love, though, there came a point in Star Trek III: The Search For Spock, where Captain Kirk made a decision that must have pained him enormously – in order to defeat the Klingons attacking him and save his crew, James Kirk destroyed the Enterprise. The occasion, in the film, was treated with the solemnity of a funeral, which no doubt matched Kirk’s mood. The film ends with the crew returning to Vulcan on a stolen Klingon vessel, rather than the Enterprise. But they returned victorious.

We are often, in our roles as leaders, driven by a passion. It might be a product or service, it might be a way of doing things. But no matter how much that passion burns within us, the reality is that times change. Different products are created. Different ways of doing things are developed. And there will come times in your life when that passion isn’t viable anymore. A time when it no longer makes sense to pursue your passion. When that happens, no matter how painful it is, you need to blow up the Enterprise. That is, change what isn’t working and embark on a new path, even if that means having to live in a Klingon ship for awhile.

Final Takeaway:

In his many years of service to the Federation, James Kirk embodied several leadership lessons that we can use in our own lives. We need to keep exploring and learning. We need to ensure that we encourage creativity and innovation by listening to the advice of people with vastly different opinions. We need to occasionally get down in the trenches with the members of our teams so we understand their needs and earn their trust and loyalty. We need to understand the psychology of our competitors and also learn to radically change course when circumstances dictate. By following these lessons, we can lead our organizations into places where none have gone before.

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